Global Poverty: Alternative Perspectives on What We Should Do--and Why David Schweickart Journal of Social Philosophy (Winter 2008)

Charles Beitz observed recently that "philosophical attention to problems about global justice is flourishing in a way it has not in any time in recent memory." He attributes this phenomenon to two facts: "we face an assortment of urgent practical problems that are not likely to be solved, if they can be solved at all, without concerted international actions," and "there is . . . the emergence of a nascent global capacity to act."1 This observation calls to mind Marx's famous dictum, "Mankind inevitably sets itself only those tasks is it able to solve. . . . The problem itself arises only when the material conditions for its solution are already present, or at least in the course of formation."2 This dictum fits the issue at hand. The "urgent practical problem" of global poverty has become a problem--as opposed to an inescapable part of the human condition--only because material conditions now exist for its eradication. In this paper I will consider the similarities and differences between two major philosophers in their treatment of global poverty. Both see global poverty as massive and as eradicatable, but their normative frameworks and policy prescriptions differ. I will then point out that neither pay attention to a major causal culprit: the structural imperatives of global capitalism. I conclude by identifying four reasons for this negligence, then responds briefly to each. I. Two Philosophers Among the most prominent philosophers who have taken up the issue of global poverty are Peter Singer and Thomas Pogge. There is a substantial amount of agreement between them. They agree that the extent of global poverty is vast. Pogge points out that 46% of humanity--nearly half the global population--live below the World Bank's $2/day poverty line; 1.2 billion people live on less than half of that, i.e., less than $1/day.3 Poverty statistics can be presented more dramatically. Peter Singer notes that on Sept 11, 2001, 3000 people died in the World Trade Center attack; on Sept 13, 2001, two days later, UNICEF released its report indicating that 30,000 children under five had died that day of preventable diseasesand 30,000 every other day during the past year, some ten million in all.4 Thomas Pogge observes, "[In the fifteen years since the end of the Cold War] some 18 million human beings have died prematurely each year from poverty-related causes, accounting for fully one-third of all human deaths. This fifteen-year death toll of 270 million is considerably larger than the 200-million death toll from all the wars, civil wars, genocides and other government repressions of the entire 20th century combined."5 For those who find this assertion incredible (as I did, initially), Pogge supplies a breakdown in a footnote, adding up the figures for some 284 "mega-death events of violence and repression" that occurred during the century just past, among them World War I, World War II, the atrocities of Stalin and Mao, and some 281 other

2 calamities. The total for the century is a quarter less than the poverty deaths since the end of the Cold War. Singer and Pogge also agree that it is technically feasible to eliminate poverty. Pogge calculates that $312b per year could eliminate global poverty; that is to say, raise everybody above the $2/day threshold. This represents a mere 1% of total global annual income.6 Recently Singer looked at the UN Millennium goals, which were set in 2000 by the largest gathering of world leaders in history. Among the goals endorsed by these 189 dignitaries: 1) To reduce by half the proportion of people who suffer from hunger. 2) To ensure that children everywhere can take a full course of primary schooling. 3) To reduce by two-thirds the under-5 infant mortality rate. 4) To reduce by half the number of people without access to safe drinking water. 5) To halt, then begin to reverse the spread of HIV/AIDs, malaria and other major diseases. Singer then looked at the cost estimate for meeting these goals, as calculated by the special U. N. task force headed by Jeffrey Sachs, charged with making such an estimate. The Commission came up with the figures--$121b in 2006 rising to $189b in 2015. He then did something quite interesting. He looked at the incomes of the top tenth of one percent of the U.S. taxpayers, data only recently available, thanks to the work of economists Thomas Piketty and Emmanuel Saez (of cole Normale Suprieure, Paris and U.C. Berkeley, respectively). His conclusion is startling: if the top .01 percent (the top one hundredth of one percent) contributed a third of their annual income (leaving each household with an average $8 million to spend as they please) and the rest of the top one-tenth of one-percent contributed a quarter (leaving them with an average of $1.5 million)--we would have $126b--$5b more than was needed in 2006. That is to say, without any additional contribution from any government, any non-U.S. citizen, or any U.S. citizen from the bottom 99.9% of our population, we could meet the Millennium goals. Singer himself was startled: For more than 30 years, I've been reading, writing and teaching about the ethical issue posed by the juxtaposition, on our planet, of great abundance and life-threatening poverty. Yet it was not until, in preparing for this article, I calculated how much America's top one percent actually make that I fully understood how easy it would be for the world's rich to eliminate, or virtually eliminate, global poverty. . . . I found the result astonishing. I double-checked the figures and asked a research assistant to check them as well. But they were right. Measured against our capacity, the Millennium Development Goals are indecently, shockingly modest. 7 Finally, Singer and Pogge are in basic agreement that something must be done--by us. Singer concludes his classic 1972 article, "Famine, Affluence and Morality" with a moral demand:

3 Discussion is not enough. What is the point of relating philosophy to public (and personal) affairs if we do not take our conclusions seriously? In this instance, taking our conclusion seriously means acting upon it. The philosopher will not find it any easier than anyone else to alter his attitudes and way of life to the extent that, if I am right, is involved in doing everything we ought to be doing.8 Thomas Pogge, for his part, is furious at our leaders, but he doesn't think that lets the rest of us off the hook: "Such 'honorable' and otherwise unremarkable people [as our politicians and negotiators] have knowingly committed some of the largest human rights violations the world had ever seen. But does their guilt absolve ordinary citizens of responsibility?" Not at all, he says: The fact that we choose to remain ignorant, choose to allow important structural features of the world economy to be shaped by unknown bureaucrats in secret negotiations cannot negate our responsibility for the harms that our governments inflict upon the innocent. That quote is from his Ethics and International Affairs (2005) article.9 In his Journal of Ethics article of the same year he is even more scathing about our political leadership: "Adolf Hitler and Joseph Stalin were vastly more evil than our political leaders, but in terms of killing and harming people they never came anywhere near causing 18 million deaths per year."10 Singer and Pogge agree: something must be done. But what? Now things get more complicated. For what is to be done follows from the analysis of the problem--and their analyses differ. II. What Is to Be Done--Singer As is well known, Peter Singer is a utilitarian. From a utilitarian perspective, there is no morally relevant distinction between killing and letting die, at least not when that death could be easily prevented by your action. He offers the example of walking past a shallow pond and seeing a child drowning in it. "I ought to wade in and pull the child out. This will mean getting my clothes muddy, but this is insignificant, while the death of the child would presumably be a very bad thing."11 The principle here is straightforward: "If it is in our power to prevent something bad from happening, without thereby sacrificing anything of comparable moral importance, we ought, morally, to do it."12 In One World he uses a different example, taken from Peter Unger's Living High and Letting Die, which he paraphrases as follows: Bob is close to retirement. He has invested most of his savings in a very rare and valuable old car, a Bugatti, which he has not been able to insure. The Bugatti is his pride and joy. . . . One day, when Bob is out for a drive, he parks the Bugatti near the end of a disused railway siding and goes for a walk up the track. As he does so, he sees that a runaway train, with no one on board, is running down the railway track. Looking further down the track he sees the small figure of a child playing in a tunnel and very likely to be killed by the runaway train. He can't stop the train and the child is too far away to warn of the danger, but he can throw a switch that will divert the train down the siding where the

4 Bugatti is parked. Then nobody will be killed--but since the barrier at the end of the siding is in disrepair, the train will destroy his Bugatti. Thinking of his joy in owning the car, and the financial security it represents, Bob decides not to throw the switch.13 We would all agree, I presume, that Bob did something horribly wrong. But, asks Singer, are we not all in exactly the same situation relative to the world's poor? It has been estimated that a $200 donation to UNICEF or Oxfam America will save the life of a child. Who among us cannot spare $200--a far lesser sacrifice than we think Bob should make? Singer concludes that each of us with some income to spare ought to give at least one percent of our income toward poverty relief.14 This, he asserts, is a minimal, not optimal, amount. In his popular textbook, Practical Ethics, he proposes 10%.15 In his early essay, "Famine, Affluence, and Morality," he cites approvingly Aquinas's even more stringent dictum: Whatever a man has in superabundance is owed, of natural right, to the poor for their sustenance. So Ambrosius says, and it is also to be found in the Decretum Gratiani: "The bread which you withhold belongs to the hungry; the clothing you shut away to the naked . . ." 16 Singer also thinks we should also lobby our government to increase its level of foreign aid, which is a pitiful 0.1% GDP--far below the UN target of 0.7%--and see to it that this aid is really targeted to help the poor and not given simply to enhance our own "strategic or cultural interests" (a polite way of alluding to the fact that Israel and Egypt get the most).17 III. The Fallacy of Philanthropy Not surprisingly, there have been many criticisms of Singer's troubling argument. One of the most powerful, to my mind, has come from Paul Gomberg. Gomberg argues that our moral intuition about the drowning child does not confirm the utilitarian-consequentialist principle that there is no significant difference between killing and letting die. Indeed, Gomberg claims that our moral intuitions about our "duties of rescue" are not consequentialist at all. To make his point, he presents a variation on Singer's example: Libby has been so impressed with the discussion of Singer in her Ethics class that she has decided to sell her one valuable prized possession, a pair of boots made by a famous artisan, to a collector who will pay $5000 for them. Having also read Unger, Libby believes that, by the very most conservative estimates, the $5000, given to UNICEF, will give twenty infants who would otherwise die the overwhelming probability of living to adulthood in good health and having productive lives. Libby puts on the boots for the last time (it takes several minutes to put them on and take them off), and, carrying a spare pair of shoes over her shoulder, walks to the collectors house to sell them. You can see what's coming, can't you? On the way she encounters a child in imminent danger of drowning in a shallow pond. If Libby wades in to rescue her, the boots will be spoiled and valueless. 18

5 What should Libby do? Gomberg thinks the answer obvious. "Libby must wade in and pull the child out. To let the child drown is ethically grotesque." (In a footnote Gomberg tells us that Singer (in correspondence) bites the utilitarian bullet and says that "while we would shudder at the sort of person who would walk past the child, [in doing so] she does the right thing."19) I side with Gomberg here, as will, I presume, most readers. So there is something wrong with Singer's argument. But what? Gomberg makes a compelling observation. Our ethical uneasiness about the persistence of global poverty is about precisely that: the persistence of poverty. It is not focused on specific individuals--as are our duties to rescue. It follows that causality is a concern, as it is not with respect to drowning children. We don't ask ourselves why the child is thrashing about in the water or wandering through a railway tunnel when we assess our ethical duty in those instances. But in deciding what we should do regarding global poverty, it becomes crucially important to know why there is persistent poverty in the face of material abundance. We need to understand causality in order to assess the effects of our actions--not on the specific (though nameless) individuals who could be aided by our charity--but on the problem motivating our concern, namely global poverty itself.20 Indeed, it might be the case--as Garrett Hardin famously (many would say "infamously") argued thirty-some years ago--that our charitable efforts make matters worse.21 IV. What Is to Be Done--Pogge Thomas Pogge does not challenge Singer's approach directly. He is in fact sympathetic to Singer. The appeal to positive duties has been well-presented by Peter Singer, Henry Shue, Peter Unger and others. If citizens in the affluent countries were minimally decent and humane, they would respond to these appeals, and would do their bit to eradicate world poverty. If they did this, my argument would be of much less interest and importance.22 Pogge's argument invokes a normative framework that would seem to circumvent the Gomberg critique. Pogge's basic moral framework is human-rights-based, not utilitarian. He does not appeal to the principle to which Singer appeals, namely our duty to alleviate suffering when this can be done at little cost to ourselves. Justice, says Pogge, prescribes only negative duties: one must not violate the human rights of othersor support institutions that do so. There is a morally significant difference between killing and letting die. Killing is worse. But that is exactly what we are doing. "Are we hunger's willing executioners?" he asks.23 He answers this question in the affirmative. Pogge includes "socioeconomic rights" on his list of human rights. He endorses the U. N. Declaration on Human Rights, which specifies, among other things, the right to a standard of living adequate for the health and well-being of oneself and ones family, including food, clothing shelter and medical care (UDHR, Article 25)." He proceeds to argue that citizens of rich countries, to the extent that they do not challenge certain governmental policies, are violating the human rights of citizens of poor countries. In doing so, Pogge rejects what he calls explanatory nationalismthe notion that poor countries are poor largely through their own fault--defective culture, corrupt leadership, misguided economic policies, whatever. He acknowledges that many poor country regimes are

6 inept and corrupt--but that does not absolve us of responsibility. For two reasons. First of all, some of our own policies are, in and of themselves, inflicting harm on poor countries. If two factories, A and B, are polluting the local water supply, the fact that A is polluting does not mean that B is free from blame. Secondly, some of our policies actually encourage the kinds of corrupt, non-democratic governance that we deplore (especially when trying to absolve ourselves of responsibility). Pogge singles out two sorts of "privileges" that we grant these regimes that have this effect: resource privileges and borrowing privileges. We accept the right of a government, no matter how it comes to power or how corrupt it is, to sell its country's resources on the open market. Rather than treating such behavior as trafficking in stolen goods, we avidly purchase the ill-gotten wares. We also allow such governments to borrow freely on the international financial markets--and hold successor governments responsible for the repayment of whatever debt their predecessors have incurred. (Perhaps the most notorious recent example is that of Rwanda. The debt incurred by the genocidal Habyarimana government, much of which was incurred to buy the weapons used against the forces that eventually ended the genocide, was passed on to the new government. Pogge quotes from the report of the International Panel of Eminent Personalities, Rwanda: The Preventable Genocide, which notes grimly: "Instead of Rwanda receiving vast sums of money as reparations by those [powerful rich countries] who had failed to stop the tragedy, it in fact owed those same sources a vast sum of money."24) Needless to say, these privileges make the seizure of power by whatever means highly attractive. There are resources to be sold and money to be borrowed, large chunks of which to be squirreled away in Swiss bank accounts. Apart from policies that incentivize the non-democratic seizure of power and the corruption that inevitably accompanies non-accountable government, Pogge points his finger at two other sorts of activities in which rich countries engage that damage poor countries. Here the damage is direct. 1) Rich countries insist that trade barriers erected by poor countries to protect domestic industries be eliminated, while maintaining their own protectionist policies. 2) Rich countries grant subsidies to many of their own producers, while poor countries are compelled to scrap theirs. These policy asymmetries derive from the overwhelming superior bargaining power wielded by rich countries in trade negotiations. Pogge proposes that such rich-country tariffs and subsidies be removed. He cites the Economist's estimate that poor countries could export $700b more per year to rich countries if protectionist measures were eliminated. He notes that rich countries subsidize their agriculture to the tune of $245 billion per year. "My complaint against the WTO regime," he says, "is not that it opens markets too much, but that it opens our markets too little."25 If these measures prove insufficient, he offers an additional policy. He proposes that we institute a "Global Resource Dividend." He proposes that a tax be levied on the sale of natural resources.

7 This tax will, of course, be passed on to consumers in the form of higher prices, so this is really a consumption tax, which is appropriate. (The more resources one consumes, the more tax one pays.) The proceeds of this tax should then be distributed to the poorest of the poor. Pogge notes that we need only raise about $300 billion, so this tax need hardly be excessive. Although Pogge's analysis stirs both brain and blood (and I mean that seriously--I don't in any way want to trivialize the fine work he is doing), there seems to be a problem here. We, citizens of affluent countries, are said to be governed by leaders whose policies are killing millions. Thus we must take action, for they are acting in our name and with our consent. But what policies exactly are doing the damage? Pogge, as I've noted, points to four, two connected with incentivizing dictators, two that damage poor countries directly. Let us concentrate on the latter, since it is obvious that political democracy is not a sufficient condition for eliminating global poverty. (We need only think of India or the Philippines.) The problem here is that it is not at all clear that if we reverse the policies that Pogge sees as directly damaging, i.e., eliminating our trade barriers and ceasing subsidizing agriculture, then global poverty would disappear. In fact it is quite clear that it would not. Think of the numbers. Pogge says we need $300 billion annually to eliminate global poverty. If the Economist estimate is correct, reducing trade barriers would allow poor countries to export about $700 billion more to us per year than they currently do. But this $700 billion represents the total value of the exports, not the value available for poverty relief. From the $700b in export revenues we must subtract the cost of machinery, pesticides, seeds, and other materials imported from rich countries, as well as service on the foreign loans that allowed these industries to be set up. We must also subtract the costs of labor and raw materials purchased locally. We must then estimate how much of the remainder would actually go to the poorest strata of the society, so as to pull significant numbers above the $2/day poverty threshold. However we calculate these factors, the figure is going to be far, far less than the $300b Pogge says is necessary to bring everyone above that level. Similar calculations for agricultural subsidies lead to the same conclusion. The fact that rich countries subsidize their agriculture to the tune of $245b/year in no way implies that ending such subsidies would result in a substantial fraction of that total reaching the truly needy. Eliminating subsidies would presumably allow poor countries to export more of their agricultural products to rich countries. But shifting to export agriculture has two problematic consequences. First of all, the extra land that would be cultivated for export crops would likely comes from land formerly devoted to domestic food production, and/or from clearing forests and engaging in other environmentally damaging activities. Secondly, such a shift typically displaces poorer peasants who lack access to the capital necessary to make the shift, thus benefiting the better off at the expense of the worse off.26 So it seems certain that more will be required of us than "merely" pressuring our governments to stop doing the things that Pogge identifies as killing people. Enter the Global Resource Dividend--Pogge's proposal to tax the sale of natural resources and target the proceeds to the poor. This is his back-up plan. But notice, we are now asked to do something positive. We are now asked to institute a scheme that would require our paying higher prices for items we consume so as to benefit the global poor. We are now back to precisely where

8 we were with Singer--and the question of causality. Doubtless channeling the substantial sums that the GRD would generate to poor people would save some of them. But would it eliminate global poverty? We have seen that the "causes" that Pogge has elucidated, namely, our violation of the basic tenets of free trade, cannot be the whole story. They would seem to be not much of the story at all. But if we don't know what the real causes are, how can we be confident that the GRD will do the trick? What if, as a significant number of reputable scholars and practitioners assert, a lack of money is not the problem? What if Thomas Dichter is right? Drawing on his thirty-five years in the field, Dichter, echoing Hardin, argues that what is needed is not more money, but the opposite, "a radical reduction in development assistance."28 What if David Ellerman (mathematician, philosopher, economist and former advisor to Joseph Stiglitz at the World Bank) is right that money is not the key to development assistance, that in fact "money is the magnet that sets all compasses wrong."29 Surely Michael Maren's book, The Road to Hell: The Ravaging Effects of Foreign Aid and International Charity should give us pause.30 Perhaps the fact that millions of our fellow citizens have not responded to Singer's clarion call, nor to Pogge's for that matter, is not due to the fact that our citizens lack "minimal decency and compassion," as Pogge, quoted earlier, alleges--but that they harbor a deep suspicion that such remedies as our philosophers propose simply won't accomplish what we want. It can't be that simple, or it would have been done long ago.31 Something else must be going on. V. The Elephant in the Room The elephant has not gone entirely unmentioned by the major players in the global poverty debates. Singer, commenting on Thomas Friedman's argument that globalization forces countries into a "Golden Straitjacket," remarks that this may be true, "at least as long as no political party is prepared to challenge the assumption that global capitalism is the best economic system."32 Nobel-laureate Amartya Sen, in his Development as Freedom asserts that the solutions to the problems of global inequality, grinding poverty and environmental degradation "will almost certainly call for institutions that take us beyond the capitalist market economy"33 But these are isolated remarks. The connection between capitalism and global poverty is a question never taken up systematically by Singer, or Sen, or Pogge. This might seem odd, since poverty in the midst of plenty has been a fundamental problem with capitalism from the beginning. As Karl Polanyi points out in his great work, The Great Transformation (reissued several years ago with a Forward by Nobel laureate, Joseph Stiglitz), eighteenth and nineteenth century England struggled with what at the time was a baffling new phenomenon: rising prosperity accompanied by ever more pauperism.34 In previous times an increase in poverty was typically due to war or bad weather, affecting rich and poor alike-although, of course, the poor more severely than the rich. Something different was happening now. Attempts were made at dealing with the problem--most famously the Speenhamland Law, which required that low wages be supplemented by public funds to insure families "the right to live." But these proved to be disastrous. For, as Polanyi notes, with low wages so generously supplemented, "no laborer had any financial interest in satisfying his employer," and so labor productivity plummeted. Although extremely popular when introduced, "in the long run the results were ghastly."35 Something unprecedentedly strange was going on. The need to explain and justify this
27

9 paradoxical state of affairs required both a new "science" and a new ethical theory. The new science that came into being was political economy; the new ethical theory, utilitarianism. In Polanyi's words, Christian society was giving place to a denial of responsibility on the part of the well-todo for the conditions of their fellows. The Two Nations were taking shape. To the bewilderment of thinking minds, unheard-of wealth turned out to be inseparable from unheard-of poverty. [Soon enough] scholars proclaimed in unison that a science had been discovered which put the laws governing man's world beyond any doubt. It was at the behest of these laws that compassion was removed from the hearts, and a stoic determination to renounce human solidarity in the name of the greatest happiness for the greatest number gained the dignity of a secular religion.36 Interestingly enough, two centuries later, Pogge's question, "how can severe poverty of half of humankind continue despite enormous economic and technical progress"37 is still explained and justified in much the same manner, i.e., by appeals to economic theory and utilitarianism, as a cursory reading neoliberalism's dynamic duo, Friedman and Friedman (Milton and Thomas) readily confirms.38 To be sure, the message has changed slightly. The message now is not the brutal assertion of our intellectual forefathers that poverty is necessary for prosperity, but the kinder, gentler assertion that if only we would desist from our soft-hearted but misguided attempts at interfering with the market, then poverty would, if not disappear altogether, at least shrink to insignificance. The Friedman-Friedman policy prescriptions, however, remain much the same. Government may help a little, but not too much--or the results will be ghastly. Not only have we not resolved the paradox of wrenching poverty within countries of astonishing wealth, but as capitalism has become truly global, the national pattern has reproduced itself on a global scale. (Interestingly enough, two centuries ago most economists agreed that the poor were more numerous in rich countries than in poor ones. As one observed, "the greatest number of poor is to be found not in barren counties or barbarous nations, but in those that are the most fertile and most civilized."39) Given this history, one might think that any serious consideration of global poverty would have to address the prima facie case that capitalism is causally implicated. Unfortunately our major "poverty philosophers" do not. In fact the case is more than prima facie. There is an argument that can be made, and it is not terribly complex. Let's start with a basic economic truth: a healthy capitalism requires significant unemployment. All economists know this, although they are not inclined to say so directly.40 Instead they talk of "lee-sur" (LSUR)--the lowest sustainable unemployment rate. (The earlier term "natural rate of unemployment" has fallen out of favor, since it is too obvious that there is nothing "natural" about unemployment.) If the unemployment rate gets to low, workers get uppity, press for higher wages, which leads to higher prices, more pressure for wage increases, ultimately runaway inflation--which is bad for all of us. Even less talked about is the fact that this unemployment must be quite unpleasant. Since it is a defining characteristic of capitalism that the employees of enterprises are distinct from the owners, there must be a mechanism to keep the workforce disciplined. Since labor under

10 capitalism, unlike slave or serf labor, is "free," physical force is ruled out. The owner is not allowed to whip his employees or send his troops to raze their villages. Hence the threat of being fired must serve as the disciplinary mechanism. But to be effective, the consequences of job-loss must be severe. This was the great lesson driven home by Speenhamland and all subsequent attempts at providing full employment or generous unemployment benefits under capitalism. If unemployment is not degrading and demoralizing, workplace discipline will break down--and all of us will suffer. The happiness of some must be sacrificed for the greater happiness of the many.41 One might object that this "basic economic truth" may explain the persistence of poverty within rich countries, but not global poverty. Indeed, global poverty would seem to be bad for capitalism. To be sure, the availability of cheap labor abroad can be, and regularly is, employed as a threat to keep the domestic workforce in line. But this benefit would seem to be outweighed by another, more pressing consideration: the need to sell one's products. Surely rich country capitalist firms would be better off if the rest of the world were richer, and hence better able to buy their products. The trouble is, we have a collective action problem here of a type familiar in game theory. From the point of view of an individual capitalist, the best of all possible worlds would be one in which he pays his workers very little (thus minimizing his costs) while all other capitalists pay their workers a lot (thus maximizing his possible sales). But the individual capitalist has control only over what he pays his own workers. He has none over what other capitalists pay theirs. It's the familiar "prisoners' dilemma." Since all capitalists face the same situation, a non-optimal choice will be made--and so wages will remain lower than they would if capitalists could be assured that their competitors would not undercut them by paying their own workers less.42 We are now in position to understand the basic argument connecting contemporary capitalism to global unemployment and global poverty. Let me sketch what I take to be the basic scenario being played out today. It is a four-part story: 1. Capitalism is an enormously productive economic order. Each enterprise is under pressure to produce as efficiently as possible and to utilize the most productive technologies available. These productivity gains are employed to undercut competitors, so as to enlarge market share. i.e. to produce and sell more. Hence the ever-present threat of overproduction (relative to effective demand) at home. 2. Capitalist countries, therefore, always press other countries to lower their trade barriers. They also press for the elimination of barriers to capital flows, since capitalists, like everyone else, want to enlarge their opportunity sets.43 When dealing with poor countries, the rich capitalist countries usually get what they want. They have "foreign aid" of their own to dispense, and they have effective control of the IMF and World Bank, the major international agencies that grant aid and loans to poor countries. 3. But poor country agriculture and poor county industry cannot compete with rich country technology, so local agriculture is disrupted and local industries are destroyed, rendering millions unemployed. (This process is utterly current and as old as capitalism. Marx quotes from the Governor-Generals report of 1834-35 on the effects of British textile imports on

11 domestic cloth production in their crown-jewel colony: The misery hardly finds parallel in the history of commerce. The bones of the cotton weavers are bleaching the plains of India.44) 4. These displaced people migrate to cities, where they are available as cheap sources of labor to capitalist industries (sometimes) setting up there, often financed by rich-country capital. But to the extent that these low-wage workers--the relatively few who actually find work--displace high-wage workers in the rich countries, the problem of effective demand (and hence overproduction) is further exacerbated. The result: the severe poverty of half of humankind continues despite enormous economic and technological progress. Severe poverty abroad and ever increasing economic insecurity at home-not a propitious state of affairs. This analysis has a disturbing corollary. So long as capitalism remains the dominant economic order, the situation is not going to improve much, if at all, and may well get worse. Even if Pogge's GRD were enacted, and the proceeds efficiently distributed to those most in need--we would still have massive poverty. Precisely because the sums transferred are so small (relative to global GDP), they will have little effect on global effective demand, and so won't touch the underlying problems of overproduction and unemployment. Think about it. Even if the GRD proceeds managed to raise everyone above the $2/day threshold)--which is highly unlikely, does anyone seriously believe that the social pathologies associated with global poverty would disappear? There might be fewer under-5 poverty-related deaths--but wouldn't that simply give us more poor children living in squalor, more glue-sniffing youths living in slums. Would a world structured much as it is today, but with half its population earning less than, say, $3/day, approximate a just global order?45 VI. Why Don't We Talk about the Elephant? It is worth asking, given the obvious prima facie case that global capitalism is implicated in the persistence of global poverty, why is this not mentioned--or if mentioned, not taken up in a systematic fashion--by the top philosophers who address the question? Let me resist the temptation to invoke the Marxian explanation: mainstream media and mainstream academia do not espouse ideas that run directly counter to the ruling ideology. ("The ruling ideas of any society are the ideas of its ruling class," says Marx) I happen to think that there's something to this explanation, quite a bit in fact, but let me suggest four other reasons. These four derive from the fact that if we agree that capitalism is the central problem but still want to believe that global poverty can be eliminated, then we have to believe that there exists a viable alternative to capitalism. But serious consideration of such a possibility runs up against at least four cognitive obstacles. 1. The belief that socialism, as an alternative economic model, has been tried and has failed. 2. The belief that we do not have a clue as to what a viable socialism would look like. 3. The belief that, even if there were a viable socialist alternative to capitalism, it would be no more likely to solve the problem of global poverty than capitalism. 4. The belief that the transformative task--getting from capitalism to socialism--is so large that even thinking about it is a waste of intellectual energy.

12 Let me conclude by addressing (briefly) each of these in turn. Obstacle 1, however emotionally gripping, is of course intellectually silly. The fact that one form of socialism failed does not imply that all forms must fail. All the failures were based on the basic Soviet model of non-market centralized planning. There are other models. (The fact that democracy failed in ancient Greece does not prove that democracy is unworkable.) Obstacle 2 is more serious. This was Richard Rorty's position: "It is going to take a long period of readjustment for us leftist Western intellectuals to comprehend that the word "socialism" has been drained of force. [We are] going to have to stop using the term "capitalist economy" as if we knew what a functioning non-capitalist economy looked like."46 This is a serious issue, but Rorty is wrong. We do know what a functioning non-capitalist economy would look like. There has developed over the past several decades a serious literature advocating forms of socialism that do not have the structural defects of the Soviet model.47 Consider "Economic Democracy." Like most socialist alternatives articulated these days, it is a form of "market socialism." Competitive markets are retained, but democracy is extended to the workplace, and to the financial sector. Lack of space precludes spelling out the details or providing an adequate defense here, but if I am right, 48 we could create a viable democratic alternative to capitalism here at home by a) democratizing our publicly-traded corporations, having management answerable, not to stockholders, but to the employees, who elect a board of directors on the basis of one-person, one-vote, and b) generating the bulk of society's investment fund, not from the private savings of wealthy individuals but from a flat-rate capital assets tax on all business enterprises, then allocating these funds to regions, to be loaned out by public investment banks to existing business wanting to expand production or upgrade their technologies or to entrepreneurial individuals or collectives wanting to start new businesses. That is to say, Economic Democracy replaces the two key functions of the capitalist class, namely monitoring corporate management and providing capital for investment, with more democratic mechanisms--thus rendering that class functionally obsolete. Notice, Economic Democracy remains a competitive market economy. It also allows small businesses to exist as they do now. It even retains space for an entrepreneurial capitalist sector.49 But the "commanding heights" of the economy have been democratized. I have argued at length in Against Capitalism and in After Capitalism that such a model is theoretically sound, and that its viability is well supported by existing empirical evidence.50 I argue that such a system would not only be vastly more democratic than any plausible form of capitalism, but more egalitarian and more rational in its growth. And better able to deal with the issue of global poverty--which brings us to Obstacle 3. There are two features of Economic Democracy that render it compatible with a world without poverty. (It is also compatible with ecological sustainability, another insoluble problem for

13 capitalism. ) First of all, democratic firms are not under pressure to grow, as they are under capitalism. They are not under pressure from stockholders to keep expanding share value. Indeed, successful firms grow only reluctantly, since taking on more employees means sharing profits with more workers while diluting the democratic influence of the existing workforce. (The tendency to maximize profit-per-worker rather than total profits has long been noted in the theoretical literature on worker self-management. This feature has some negative consequences, but the bulk are positive.52) A key implication relevant to the issue at hand: firms are under no compulsion to penetrate poor-country markets, driving their less sophisticated competitors out of business. In general, overproduction is not the problem in Economic Democracy that it is with capitalism, since workers are free to cut back on production when demand is slack, giving themselves more leisure time in compensation. Indeed, using technological development to increase leisure rather than consumption will likely be a key characteristic of this form of socialism. A second feature of Economic Democracy key to eliminating global poverty is its aversion to wage competition. The firms in an Economic Democracy continue to compete with one another for market share. This is a healthy competition, pressuring businesses to produce what consumers want, to innovate, and to use their resources efficiently. But democratic firms have no interest in wage competition, since that clearly involves a race to the bottom. The aversion to wage competition operates in its international trade relations, manifesting itself in a policy of "socialist protectionism." An Economic Democracy will place a tariff on goods coming from low-wage countries so as to negate the cost advantage due to the low wages (this is the protectionist part), but it will then rebate the tariff proceeds to the poor countries, to be used as the countries see fit in addressing their pressing problems (this is the socialist part). These proceeds need not go to the governments in question. They might be more effective is channeled to NGO's working to improve the conditions of workers there. The employment security afforded workers in an Economic Democracy has important positive implications regarding global poverty. Since firms in an Economic Democracy are protected from low-wage cost competition, the nation need not be protective of its intellectual property. It will thus make such property freely available to poor countries. Workers need not worry that low-cost factories will be set up abroad, using these new technologies or producing these new products, to put them out of work. Indeed, given the much greater job security its citizens enjoy, they are likely to be more generous than their capitalist-country counterparts in responding to the needs of poor countries. They can devote more of their public research budgets to addressing poor country concerns, and can provide financial support for poor-country students who wish to study at their research centers and institutions of higher learning. In short, citizens of an Economic Democracy are in position to provide poor people with the tools they need to help themselves, respecting their autonomy, recognizing that it is the poor people themselves who must be the fundamental agents of change.53 Citizens of a capitalist country are not so positioned. A serious objection to my argument merits consideration. It may be true that the rapacious capitalism that my stylized story describes is incompatible with the project to eliminate global poverty, but are there not more benign versions of capitalism? Is it really necessary to kill the goose that has laid those golden eggs that make the elimination of global poverty even thinkable? Can we not modify our institutions so that everyone gets a taste of the omelet?
51

14 This is not the place for a detailed analysis of the multitude of reform proposals currently on the table--many of them set out in Jeffrey Sachs's much-acclaimed The End of Poverty: Economic Possibilities for Our Time (New York: Penguin Press, 2005)--but some remarks are in order. First of all, it should be noted that plans to end global poverty are hardly new. And they have not had much success. Consider New York University economist William Easterly's assessment: United Kingdom Chancellor of the Excehequer Gordon Brown is eloquent about one of the two tragedies of the world's poor. In January 2005, he gave a compassionate speech about the tragedy of extreme poverty afflicting billions of people, with millions of children dying from easily preventable diseases. He called for a doubling of foreign aid, a Marshall Plan for the world's poor . . . . He offered hope by pointing out how easy it is to do good . . . Gordon Brown was silent about the other tragedy of the world's poor. This is the tragedy in which the West spent $2.3 trillion on foreign aid over the last five decades and still had not managed to get twelve-cent medicines to children to prevent half of all malarial deaths. The West spent $2.3 trillion and had still not managed to get four-dollar bed nets to poor families. The West spent $2.3 trillion and still had not managed to get three dollars to each new mother to prevent five million child deaths.54 To be sure, Easterly does not indict capitalism as the culprit responsible for this dismal record; he targets the "planners," whose grandiose schemes have so grossly misfired. Like virtually all mainstream thinkers these days concerned with global poverty, he averts his eyes from the elephant. An important exception is Columbia's Jagdish Bhagwati, whose In Defense of Globalization is aimed squarely at the anti-capitalist critiques of globalization, at "communists and Marxists . . . captive to a nostalgia for their vanished dreams," and the "far too many among the young [who] see capitalism as a system that cannot address meaningfully questions of social justice."55 How does Bhagwati address the argument proffered above, namely that poor countries will tend to lose out in "free competition" with more growth-obsessed companies in technologicallyadvanced countries, thus exacerbating unemployment, and hence poverty? Surprisingly, he devotes only a few pages to this charge. He admits that global competition can sometimes put people out of work. He notes that we need programs to cushion the impact--unemployment insurance and job retraining--especially since "the workers who might be laid off are more likely to be close to malnourishment and are often unable to manage and finance transitions to new jobs."56 He thinks the World Bank should help finance such programs. "Transition to what new jobs?" the reader might reasonably ask. According to a recent International Labor Organization report, barely 60% of the world's working-age population have jobs; less than half of young people (ages 15-24) are employed. And things look to be worse in 2008.57 Bhagwati acknowledges that his colleague at Columbia, Joseph Stiglitz, has argued that developing countries have high rates of unemployment, which free trade might make even worse,

15 but he finds this argument "inappropriate": Even if the workers who are fired happen to get into the pool of the unemployed, others who were unemployed would get jobs in the exporting sectors, which would expand with the freeing of trade. Thus the overall rate of employment could remain unchanged, some workers losing jobs and others gaining them. So there would be no loss of national income from a net increase in overall unemployment, and there is a production gain--a technical phrase used by economists to signify that resources have moved away from less efficient sectors and increased in the more efficient sectors.58 But of course this is just the standard Ricardian comparative advantage argument, which assumes what cannot be proven, namely, that the invisible hand will always provide new jobs to replace the old ones rendered obsolete. To be sure, it might happen that a reciprocal lowering of trade barriers will allow increased employment in the export industries to offset the job losses incurred by the farmers and domestic industries ruined by technologically-superior competition, but to assume that this happy outcome will occur is an act of faith, not a reasoned conclusion. To think that, over time, the employment increase in export industries will not merely keep total unemployment at bay, but will so overwhelm domestic job losses due to international competition that poverty will wither away, is surely wishful thinking of the highest order. It is true, of course, that some countries have been able to develop rapidly by carefully-controlled export-led growth (witness Taiwan, South Korea and now China), just as some poor people under capitalism have become rich. But it does not follow that global poverty (or even rich-country domestic poverty) can be eliminated so long as the basic institutions of capitalism remain intact. The empirical evidence would seem to point to the opposite conclusion. Bhagwati sees capitalist globalization as an overwhelmingly benign phenomenon. It is not true, he says, that "globalization needs a human face." It already has a human face, one that can be made even more attractive with some modest reforms.59 A more accurate, far less comforting portrait has been painted by .Mike Davis in his Planet of Slums, which documents conditions in the rapidly increasing mega-cities of the global South, now home to more than a billion people, provides.60 Obstacle 4) is doubtless the most difficult to surmount. If we must transcend capitalism in order to eradicate global poverty--well, how might we do that? Rather than speculate, which is all I (or anyone else) can do at this time, let us return to Pogge.61 He cites a remark attributed to Margaret Mead: "Never doubt that a small group of thoughtful, committed citizens can change the world. Indeed, it is the only thing that ever has." He then reminds us of the working class people of Manchester who, in 1787, joined the uphill battle against slavery with a petition signed by 11,000 of them. The campaign against slavery endangered their livelihoods, because much cotton from slavelabor plantations was processed in Manchester. And most of them were already much poorer than we can imagine. Those who had no money to give supported the cause in whatever way they could. Women especially, though greatly constrained by law and convention, supported the movement. . . . They did not plead poverty, powerlessness, or ignorance. Nor were they deterred by the low odds of success.62 He imagines them saying, "We understand that success is unlikely and may be impossible. But

16 we know that we must make the attempt."

63

Now Pogge thinks the solution to global poverty is easy, much easier than ending slavery. Knowing the enormous magnitude of death and destruction caused by world poverty, one is inclined to assume that many things must go right for such a huge problem to be solved. But, to the contrary, many things must go wrong for it to persist on such a massive scale year after year. . . . Despite its fearsome magnitude and destructiveness, the world poverty problem is fragile.64 He is wrong about that. Global poverty is integral to global capitalism, and the latter--at least it would so appear--is anything but fragile. (Of course the Soviet empire looked rock-solid too-until, almost overnight, it came unglued.) But the moral imperative he articulates remains. This is not to say that we should scorn Singer's demand that we contribute to charities that can save lives now, or the reform proposals of Pogge or even Bhagwati. To be sure, we must think carefully about the specific proposals, since, as authors cited above have documented, wellintentioned aid has often done more harm than good. It doesn't follow, however, that nothing of value can be done. But we should have no illusions. If we want a world without poverty--as opposed to a world with less poverty--we must struggle to get beyond capitalism. "We understand that success is unlikely and may be impossible. But we know that we must make the attempt." Notes

Charles Beitz, "Cosmopolitan and Global Justice," The Journal of Ethics 9 (2005): 11.

Karl Marx, "Preface to A Contribution to the Critique of Political Economy," in Karl Marx: Selected Writings ed, Lawrence Simon (Indianapolis: Hackett, 1994), p. 211.
2 3

Thomas Pogge, World Poverty and Human Rights(Cambridge: Polity Press, 2002), p. 2.

Peter Singer, One World: The Ethics of Globalization, (New Haven, CT: Yale University Press, 2002), pp150-51.
5

Thomas Pogge, "Real World Justice," Journal of Ethics (2005) 9, p. 31. Pogge, One World, p. 2.

Peter Singer, "What Should A Billionaire Give -- and What Should You?" New York Times, December 17, 2006.
8

Peter Singer, "Famine, Affluence and Morality," Philosophy and Public Affairs v. 1, n. 3 (1972).

Thomas Pogge, "Reply to Critics: Severe Poverty as a Violation of Negative Duties," Ethics and International Affairs v. 19, n. 1 (September 2005): 79.
9

10

Pogge, "Real World Justice," p. 33. Singer, "Famine, Affluence and Morality," p. 231. Ibid. Singer, One World, p. 186.

11

12

13

It should be noted that Singer's argument turns on the principle cited above, not on his larger, more controversial, utilitarian ethic. "In writing about the obligation to assist the world's poorest people, I want to reach people who are not utilitarians, so I don't rely on utilitarian premises for that argument." "Poverty, Facts and Political Philosophies: A Debate with Andrew Kuper," in Andrew Kuper, ed. Global Responsibilities: Who Must Deliver on Human Rights (New York: Routledge, 2005), p. 180.
14 15

Peter Singer, Practical Ethics 2nd ed. (Cambridge: Cambridge University Press, 1993), p. 246. Summa Theologica, II-II, Question 66, Article 7, cited in "Famine, Affluence and Morality," p. 239. Singer, One World, p. 191. Paul Gomberg, "The Fallacy of Philanthropy," Canadian Journal of Philosophy (March 2002): 44. Gomberg, "Fallacy," p. 45.

16

17

18

19

Gomberg, taking his cue from Bernard Williams, argues that our duties to rescue do not derive from a more general principle, as Singer claims, but are ethically primary. It is a mistake, he argues, to abstract a general principle from these concrete duties and then apply it in a wholly different context. Cf. "Fallacy, p. 33ff.
20

21

See Garrett Hardin, "Carrying Capacity as an Ethical Concept" (1976), reprinted in Christine Koggel, (ed.) Moral Issues in Global Perspective (Peterborough, Ontario: Broadview Press, 1999), pp.462-68. Hardin argues that food aid, for example, simply leads to more poor people. Moreover, starving people fight only among themselves and do not threaten us, whereas well-nourished but otherwise deprived people can create much mayhem. His is an ugly, distasteful argument, but his general point, that aid can do more harm than good, is not without merit, as we shall see below.
22

Pogge, "Real World Justice," p. 35. Pogge, World Poverty, p. 24. Pogge, "Real World Justice," p. 51. Pogge, World Poverty, p. 19.

23

24

25

For a careful analysis of this problem, see David Barkin, Rosemary Batt and Billie DeWalt, Food Crops vs. Feed Crops: Global Substitution of Grains in Production Boulder CO: Lynne Rienner, 1990).
26

The ethical basis for Pogge's positive proposal differs from Singer's. For Pogge we must compensate for our violation of human rights, whereas for Singer we have a positive duty to help when we can if the costs to ourselves aren't dire. But in either case the prescription to channel aid to the poor must confront the objection that this might make matters worse.
27

Thomas Dichter, Despite Good Intentions: Why Development Assistance to the Third World Has Failed (Amherst MA: University of Massachusetts Press, 2003).
28

David Ellerman, Helping People Help Themselves (Ann Arbor: University of Michigan Press, 2006), p. 244. Ellerman argues that "the availability of large amounts of money to developing counties overrides their other motivations, and redirects their attention to playing whatever game is necessary to get the money." (Ibid.) He agrees with Dichter that a radical reduction in assistance is necessary. "After decades of addiction to getting (and giving) aid, this 'radical reduction' is no simple matter, . . . [but] the first step to follow is the Hippocratic maxim, 'Do no harm.'" He does think, however, that "there are ways in which development assistance can be genuinely helpful if done in an entirely different way," a more "subtle, humble, indirect, autonomy-respecting" way. (p. 248)
29

Michael Maren, The Road to Hell: The Ravaging Effects of Foreign Aid and International Charity (New York: The Free Press, 1997). This book is primarily about the author's experience in Somalia--but many of his observations can be generalized.
30

Carol Gould makes a similar point in her "Coercion, Care, and Corporations: Omissions and Commissions in Thomas Pogge's Political Philosophy," Journal of Global Ethics, v. 3 (December 2007): 381-93. See especially pp. 388-89. Gould focuses more on the normative dimensions of Pogge's analysis than does this article; she does not push the institutional critique as far.
31 32

Singer, One World, p. 11. Emphasis added. Amartya Sen, Development as Freedom (New York: Knopf , 1999), p. 167. Emphasis added.

33

Karl Polanyi, The Great Transformation: The Political and Economic Origins of Our Time (Boston: Beacon, 2001).
34

35

Polanyi, Great Transformation, p. 84. Polanyi, Great Transformation, pp. 106-7 Pogge, Global Poverty, p. 3.

36

37

This is not to say that utilitarianism necessarily justifies of capitalism. My Ph.D. dissertation, "Capitalism: A Utilititarian Analysis" (1977) argued to the opposite conclusion.
38

John M'Farlane, in 1782, as quote by Polanyi, The Great Transformation, p. 108. Polanyi also cites the eighteenth century Italian economist Giammaria Ortes, who "pronounced it an axiom that "the wealth of a nation corresponds with its population, and its misery corresponds with its wealth."
39

An important exception is the great Polish economist Michael Kalecki, who, in his famous 1943 article, "Political Aspects of Full Employment," (Political Quarterly, vol. 64) made the case bluntly; "Indeed, under a regime of permanent full employment, 'the sack' would cease to play its role as a disciplinary measure. The social position of the boss would be undermined and the self-assurance and class-consciousness of the working class would grow. Strikes for wage increases and improvements in conditions of work would be higher under a regime of full employment than they are on average under laissez-faire; and even the rise in wages resulting from the stronger bargaining power of the workers is less likely to reduce profits than to increase prices, and thus affects only the rentier interests. But "discipline in the factories" and "political stability" are more appreciated by business leaders than profits. Their class interest tells them that lasting full employment is unsound from their point of view and that unemployment is an integral part of the "normal" capitalist system." Kalecki's article has been reprinted in E. Hunt and J. Schwartz (eds.) A Critique of Economic Theory (Baltimore: Penguin Books, 1972), pp.420-30. The quote is from pp. 424-5.
40

It might be objected the Scandinavian social democracy serves as a refutational counterexample to this argument. Space limitations preclude a full response, but I would argue that social democracy is inherently unstable. When workers come to feel secure in their employment, they tend to make further demands, ever more threatening to the capitalist class. Recall that in the late 1970s Swedish workers began to dream of taking control of their enterprises by compelling their employers to use a percent of their firms' profit to buy workers' shares in the enterprises (the Meidner Plan) so that, after sufficient passage of time, workers would obtain controlling interest in their companies. The Swedish business class reacted sharply, pouring large amounts of money into a successful campaign to defeat the plan. Labor union power soon began to ebb as the effects of globalization--the threat of international competition, of plant relocation and of capital flight--began to make themselves felt. Cf. Bertram Silverman, "The Rise and Fall of the Swedish Model. Interview with Rudolf Meidner," Challenge: The Magazine of Economic Affairs v. 41 (Jan/Feb 1998): 69-90.
41

42

There was a period in the post-WWII era--capitalism's so called "Golden Age"--when this assurance was obtainable. When, for example, as a result of collective bargaining with the UAW, General Motors agreed to pay their workers more, it was understood that Ford and Chrysler would do the same. But of course this "mutual assurance" has broken down completely as a result of globalization. In recent decades, with the threat of Third World revolution subsiding--and hence the threat of expropriation--these opportunities have become ever more attractive.
43 44

Karl Marx, Capital, v. 1 (New York: International Publishers, 1992), p. 406.

A cornerstone of the mainstream "let's-end-global-poverty-now" argument is the calculation showing how little it would take to bring the world's poor above the "poverty line," the latter defined as $1/ or $2/day. Hence the end of poverty seems tantalizingly within reach, requiring only a few simple reforms. Little thought is given as to what the world would look like if this goal were magically achieved. (Mainstream proponents of "let's-end-global-poverty-now" would likely agree that $2/day isn't exactly freedom from poverty, but they would presumably insist that bringing everyone up to this level this is a necessary first step. However, focusing on just this first step diverts attention from deep causal structures that make even this "easy" first step far more difficult that they imagine.)
45 46

"Richard Rorty, "For a More Banal Politics," Harper's 284 (May 1992), p. 16.

4747

In addition to my own After Capitalism (Lanham, MD: Rowman and Littlefield, 2002) and Against Capitalism (Cambridge: Cambridge University Press, 1993), see Michael Howard, Self-Management and the Crisis of Socialism: The Rose in the Fist of the Present (Lanham, MD: Rowman and Littlefield, 2000), Bruno Jossa and Gaetano Cuomo, The Economic Theory of Socialism and the Labour-managed Firm Cheltenham, UK: Edward Elgar, 1997), John Roemer, A Future for Socialism (Cambridge, MA: Harvard University Press, 1994), and Frank Roosevelt and David Belkin, eds., Why Market Socialism (Armonk, NY: M.E. Sharpe, 1994). See also, Bertell Ollman, ed., Market Socialism: The Debate Among Socialists (New York: Routledge, 1998). See my After Capitalism details and defense. A more technical presentation of basically the same model can be found in Against Capitalism.
48

I argue that a democratic economy might want to preserve an entrepreneurial capitalist sector to encourage innovation and job creation. To prevent the entrepreneurial capitalist from become a capitalist stricto sensu, i.e., a person receiving income simply on the basis of his ownership of productive assets, a simple rule would suffice: when the entrepreneur retires from active engagement with the business, he must sell it to the state, which will then hand it over to the employees to be run democratically. (There are variations on this rule that would accomplish the same result, but these need not concern us here.)
49 5050

Very briefly: Numerous empirical studies confirm that democratic firms are at least as efficient as comparable capitalist firms. We know that investment funds can be generated via taxation, since public investment is already generated that way. There is no reason to think that these public funds cannot be effectively channeled back into the economy by the transparent mechanism proposed. For more details, see Chapter Three of After Capitalism or Chapters Three and Four of Against Capitalism.
5151

See After Capitalism, p. 113ff. for an argument.

For references and a more detailed discussion of this issue, see Against Capitalism, p. 91ff. The most serious negative consequence concerns job creation and the problem of unemployment. I argue that additional policies must address this issue, in particular, having investment banks give priority to jobcreating projects and having the government serve as an employer of last resort. The fact that democratic firms lack the expansionary dynamic of capitalist firms has positive implications for the problem of ecological sustainability.
52 53

This kind of aid is precisely the sort recommended by Ellerman in his work cited above. William Easterly, The White Man's Burden: Why the West's Efforts to Aid the Rest Have Done So

5454

Much Ill and So Little Good (New York: The Penguin Press, 2006), pp. 3-4. See also his fierce critique, "The Big Push Dj Vu: A Review of Jeffrey Sachs's The End of Poverty," Journal of Economic Literature 44 (March 2006): 96-105. Jagdish Bhagwati, In Defense of Globalization (Oxford" Oxford University Press, 2004), pp. 14-15. Bhagwati is particularly concerned about those "who arrive at their social awakening on campuses in fields other than economics." English, comparative literature, and sociology, he warns, are fertile breeding grounds for virulent anti-capitalist sentiments, for students in these fields are exposed to the likes of Jacques Derrida, Edward Said, and Pierre Bourdieu. (Students of economics are presumably kept too busy with their math homework to come under the baleful influence of such thinkers.)
55 56

Bhagwati, Defense, p. 234. Global Employment Trends, (Geneva: International Labor Office, 2008), p. 11.

57

Bhagwati, Defense, p. 255. Bhagwati is uncharacteristically careless here, asserting simultaneously that "unemployment could remain unchanged" and that "there would be no loss of national income from the net increase in unemployment." (Emphases added.) He presumably meant to say that even if unemployment rises, there need be no loss of national income. But notice--an accurate account highlights the contingency of the claim.
58 59

Bhagwati, Defense pp. 30-31 London: Verso, 2006.

60

Chapter Six of After Capitalism sets out some reform proposals that would move us in the direction of Economic Democracy, and offers a couple of transition scenarios. I point out how few structural changes would be necessary for everything to change. These scenarios are speculative, however, not predictions.
61 62

Pogge, "Reply to Critics," p. 82. Pogge, "Reply to Critics," p. 83.

63

6 64

Pogge, "Reply to Critics," p. 83.